Don’t Be Equifax
February 11, 2020Japan Trying To Go Cashless For The Olympics
February 25, 2020Are you about to open a business? That’s great and at JLE Business Consultants we wish you all the best. Owning and operating a business can be a path to great prosperity but there is a lot of work that goes into it. You have a lot of decisions to make and the path that you decide could make or break your business. One of the decisions that you have to make is what kind of payments you will accept and one of the ideas that have entered your head is accepting only cash. So, is this worth it?
Cash Only!
If you are considering accepting cash only you are actually not alone. There are many businesses that are cash only and have been successful. These can be anything from a street vendor to a coffee shop to a laundromat to a lawn service. In most cases people are used to using only cash at these types of business so no one will think twice. The problem is that these businesses really don’t grow all that big. That may be what you want but for true prosperity you will need to accept other forms of payment.
Pros Of Being Cash Only
There are of course some very good reasons to accept only cash. The first is that your risk of credit card fraud is nil. That means no risk of chargebacks or a claim of fraud. When you get your money you will get to keep it and not have to worry. Along the same lines you do not need to wait for your money to be put into your bank account. When a customer hands you cash, you get it immediately. You don’t need to wait for a processor or a bank to give it to you. Also you don’t need to pay any processing or interchange fees. Believe us, as a payment processor we know all about this, but for anyone who accepts credit cards the infrastructure needed would be too expensive, which is where we come in.
Cons Of Being Cash Only
The biggest drawback is that your potential customers have become more content to use a credit or debit card (or other forms of payment) and may not carry cash. That can mean no sale for you and no money coming in. Once a potential customer is turned away they may never come back and they may tell others as well. You might lose more than just that one customer and you might not even realize it.
Of course accepting cash has its own risks. If you have an employee they may not be on the up-and-up and they could have some sticky fingers or could just lose the cash. Or a criminal could know that you have only cash and a full cash register, which could just beckon them to come and deprive you of it.
Last, if you run a cash only business you will need to keep exemplary records. You will need to account for every penny that comes in and leaves. By running a cash only business you will put yourself at a heightened risk for an IRS audit. With little to no paper trail for the business the IRS will want to make sure that they are getting every penny owed to them.
If you want to give a cash only business a go we wish you all the best but accepting credit and debit cards can make your life much easier. Not only will it encourage more customers to patronize or utilize your business but it will help you with your record keeping as digital records will be kept. There are of course other advantages as well.
If you are considering opening a business and want to know what payment options you have give JLE Business Consultants a call. We can go over your options with you and you might just find that accepting credit cards will not be as bad as you thought it would be. This is a key decision to make and we hope that you will make the decision with as much information as possible.